The Dispatch Podcast - Mitt Romney Talks Inflation and the Economy

Episode Date: May 4, 2022

Utah Sen. Mitt Romney joins Steve for a discussion on the state of the economy and how to rein in inflation. Plus, the senator answers questions about canceling student debt, the Supreme Court abortion leak, J.D. Vance’s victory in Ohio, and the latest from Russia’s invasion of Ukraine.   Show Notes: -Romney in the Wall Street Journal: “Biden’s Errors Worsen Inflation” -Capitolism: “Is President Biden Trying to Boost Inflation?” -TMD: “Washington Gears Up for a Post-Roe Future” -The Dispatch: “Non-Interventionist Republicans: A Small, Vocal Minority” Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Dispatch podcast. I'm Steve Hayes. Happy to be joined today by Senator Mitt Romney. We talked about a number of things in a relatively short amount of time. We covered the economy, Joe Biden's performance on the economy, inflation, student debt cancellation, Russia, J.D. Vance's victory in Ohio, and several other topics as well. Senator Romney, thanks for joining the Dispatch podcast. Thank you, Steve. Good to be with you. I want to start by reading the opening paragraph of your recent Wall Street Journal op-ed

and then asking you to talk about it a little bit. You wrote three factors combined during the past two years to create the perfect economic storm. COVID-19 scrambled the U.S. economy supply lines. the Federal Reserve kept its foot on the accelerator way too long. And the Biden administration did pretty much everything wrong, injecting $1.9 trillion into a supply-constrained economy, sending out stay-at-home checks, letting tenants live rent-free, squeezing oil and gas production, launching an avalanche of growth-killing regulations, lining up behind unions, and pushing yet another deficit financed budget.

Wow. That was tough. The Biden administration did pretty much everything wrong. Of those three factors, how much blame do you assign to President Biden for the situation we're in right now? Well, a healthy dose, of course, of the blame goes there. But, of course, the Federal Reserve is primarily responsible for maintaining the integrity of our monetary system. They were far too loose, far too long. My guess is that would not have been the problem it was, but for the fact that COVID threw off the supply chain in ways

that were far more extreme than any would have anticipated. But then added to that, you had the president do a couple of things that really added fuel to the fire. One was the $1.9 trillion dollars that went out of March, and that was just after the $900 billion that had gone out in January. So just a couple of months after $900 billion went out, he sent out $1.9 trillion. I was speaking yesterday with the Secretary of Health and Human Services in one state, not my state, but another state. She said that her state's budget for child care for the indigent was $55 million a year. She received a check on the American Rescue Plan for $500 million. for that program. It's like, she said, you know, what are we supposed to do with all this money?

And that happened in state after state. So all sorts of money went out. I mean, you may recall with TARP. There was a lot of screaming. You know, $700 billion went out to save the financial system. People thought that was outrageous. One point nine trillion, almost three times as much, went out, you know, went out in March. And that followed on $900 billion in January. So it's an unbelievable about a money went pouring out clearly that added fuel to the inflation embers that came as a result of the supply chain disruption and the and the federal reserves policies and they wanted more i mean 1.9 trillion dollars was not everything they asked for right i mean the president and and other democrats were pushing for more oh yeah the bbb program uh which is not entirely dead just uh mostly

dead, as Princess Bride suggests. That is something that they have pushed for. The idea is, hey, we want a lot more spending. And the president says, oh, this will be anti-inflationary down the road. It's like, yeah, down the road, maybe, but over the next few years, it would be inflationary. So just wrongheaded. I don't think the White House anticipated that the impact of what they had done, what the Fed had done and the supply chain would be as great as it is. And the American people are suffering as a result of that. You look at the way the Biden administration in its public appearances, but also in private conversations it had with your colleagues, addressed inflation. They seemed to sort of shrug it off. We heard repeatedly that it would be transitory, that it wasn't

going to be a big deal, that this would be something, I mean, as you say, a version of what you just said, you know, something maybe over the next month or two, but not a long time. We heard that throughout 2021. Why were they wrong about that? I mean, you had people like Larry Summers and Jason Furman and other center left economists suggesting that they were wrong, but they didn't pay heed. Why do you think that was? There is a human tendency to believe that what you want to have happen will happen. And I just think, I mean, I know it's true for myself. I'm sure it's true for others. The president wanted to put money out there. He knew that was popular. People are happy to get checks. States are happy to see the money. I mean, I went into the White House

with a group of us and tried to convince the president that the states were seeing record levels of surplus. And the last thing they needed was $360 billion in additional checks. And it just fell on deaf ears. There was no pickup. There was no, hey, wait a second. What are you saying? You mean California has a $60 billion surplus and we're supposed to send them $40 billion more? Why, that could be a problem. They just didn't see that. They recognized that sending out checks would be popular. What they didn't recognize is it would create what Larry Summers predicted, which is it would fuel inflation and the political impact of inflation, I think, is going to bite them hard come this November. and very well three years from now.

Yeah, the White House will point to 5.4 million new small businesses starting during the Biden administration, unemployment at 3.6 percent, widespread availability of the COVID vaccine, which has us sort of tiptoeing back towards normal and say, look, yes, of course it's true that we've had some hiccups, but this was an unprecedented situation. It affected the global supply chain. And, you know, we've gotten some. some pretty important things right, too. Do you, does give them any credit for that?

Oh, I do give them credit for a number of things. I think it's hard to take a lot of credit for the unemployment rate when you set out the kind of money they set out. I mean, clearly, if you go out and you borrow trillions of dollars from foreign countries as well as from domestic investors, and then you use that to shower the economy with money, you're going to create jobs. it's just not going to create an increase in the take-home pay in real terms that the American people want to see.

And interestingly, I think they may have thought they could have fooled some people for a while, but people recognize that everything is more expensive. Their lives are not better, and they're angry. I mean, you look at the numbers we're seeing about whether people think we're on the right track or the wrong track. People think we're on the wrong track because they recognize that they are not getting ahead. they're getting further behind. I want to read to you a tweet from White House Chief of Staff Ron Clayne taking credit for something else. He writes, after the deficit went up each year that Trump was president, it's going down each year that Joe Biden is president with the country on track to see the largest one year decline in the deficit in U.S. history in 2022.

Is that something worth celebrating? That is so laughable. It's embarrassing that Ron Clayne would put that out. I can't imagine he wrote that. Maybe he did. But my guess is someone to staff wrote it and it passed by his eyes. And he didn't realize what a self-owned that is. I mean, when you put out trillions of dollars in your first year and when we had a COVID emergency going on and Republicans and Democrats sent out a lot of money, hopefully wisely, maybe we sent out too much, by the way, but given all that money that went out to say, hey, look, we've cut the spending from what happened when COVID was an emergency is an embarrassment. And obviously does not shower him with glory. Look, I agree that the Trump administration spent way too much money

and came far from balance in the budget. Republicans did not do what we had talked about for years, which is trying to get to a balanced budget. In fact, under President Trump, even before COVID, we were seeing almost trillion-dollar-a-year deficits. That's simply unacceptable. But for the Biden administration to say, hey, we've gotten back to trillion-dollar deficits is not exactly an accomplishment. I'm glad you mentioned that about the Trump administration. I remember chasing you and Paul Ryan around the country in 2012 and listening to lots of, you know,

I thought pretty straightforward conversations about debt and deficits, back then. And you obviously took a pretty significant risk choosing Paul Ryan as you're running mate when he had been an outspoken advocate for the kinds of entitlement reforms that most people thought were the third rail of American politics. We haven't seen much talk about that in the years since. And as you say, the Trump administration spent quite a bit. Is there anybody in Washington, when you look around, is there anybody in Washington who's advocating for these issues? I mean, they haven't become less important than they were 10 years ago. You know, I think one of the surprises for anybody who takes a close look at federal spending

is that two-thirds of federal spending isn't voted on. Right. And those of us that are running for office all talk about how we cut the budget here and we cut this out. It's like it's irrelevant. The budget is one-third of federal spending. The relevant part is the two-thirds that's growing faster than the economy, not the one-third that's growing more slowly than the economy. And the two-thirds are entitlements and interest. Is there anybody advocating for that? Probably not because it's not an issue that people care about politically. It doesn't affect people's lives day-to-day.

It's something which can become backbreaking in the future. Yeah, it will. It will matter. Everybody will care about it at some point. And we're spending about a half a trillion dollars, $500 billion a year on interest right now. That's going to keep going up. As interest rates go up, as we keep borrowing, this is going to become backbreaking. It's, I mean, actually, after I lost in 2012, I got a call from Bill Clinton. And he said, he said, Mitt, the biggest concern I have is what's going to happen

when interest rates return to their normal level. Yeah. When they do, we're going to be spending more on interest than we spend to defend our country through our Department of Defense. And he's right. That's where we're going. So there are, there are a few of us. about five Democrats and about seven or eight Republicans that have come together on something known as the Trust Act, which is designed to create rescue committees for each of the major entitlements to say, okay, what have we got to do to get that particular entitlement solvent on a long-term basis? And everything's on the table. Revenue, benefits, you know, we can have arbitrage, investing in bonds, and so, I mean, there are all things we can look at.

But if we can come up with a bipartisan, bicameral approach, we'll go to the floor on a privileged basis for up or down vote. It's basically like Simpson Bowles. It's the same idea in Simpson Bowles. We take the entitlements apart. The fact that we have about 12 senators that are on board for that and the no labels group in the House, some 40 of them, endorsed the same concept. It suggests we've got some interest there, but no one's going to campaign on it.

I was going to say, I was going to say. So let's say you take that idea to the next Senate Republican lunch and you say, look, this has to be a big part of what we're talking about going into 2022. How would they look at you? Well, you know, we've had the discussion in our Senate lunch and people agree and believe it's critically important, but they also believe it's not a winning political issue. The American people just aren't focused on that. And frankly, in part, that's our problem.

Yeah. Because, you know, we didn't do anything about it when we had the White House and the House in the Senate. Yeah. And of course, we've been crying about the deficit for decades. And people say, hey, my life is okay. What's the stuff you've been doing? So we've been crying Wolf for a long time. The problem is the wolf's gotten a lot bigger and we're going to have to do something about it. Or these programs are going to run out of money. Their trust funds will go out of money. And under the law, Social Security, Medicare will see huge cuts. That's not going to happen. We've got to prevent that from happening.

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to cancel student debt? And if you're not in favor of them, is there something else that can be done to address what's a clear and significant problem? Well, canceling debt, of course, is the same as sending out checks to people. And by the way, we did that on a bipartisan basis during COVID. It was an emergency. We felt we needed to help people at a critical time. Cancelling debt now, effectively sending out cash to people would, of course, be another stimulation to the economy. It would encourage additional inflation. That's obviously one consideration. Another is a question of fairness, which is young people that have student debt tend to be higher income people. And it's basically a transfer from the economy and from our government to higher

income families. You know, you might as well instead cancel. I said jokingly, cancel, you know, auto loans, cancel mortgages. I mean, there are all sorts of debts you can cancel. Why is it we would just be canceling student debt? I think the issue I'd focus on with regards to the student debt problem is that it makes more sense to have private entities making these loans. The way Sally May has in the past to assure that as people are borrowing money, they're actually getting degrees, which will allow them to repay it. And I hate to. to be critical like this, but getting a PolySai degree is not likely to lead to a great job. You're stepping on toes, Senator. You're stepping on toes. And I was an English major,

all right? So my own toes, English major, history major, polysci. It's like people need to be told, hey, those are probably not going to lead you to be able to pay back your loans. So, you know, get a degree at engineering, computer science. Those are the place, nursing, teaching. Those are places where you're going to be able to pay back alone. But young people need that advice and that counsel so they don't take on too much debt and they are able to repay it. But the idea of saying, look, we're just going to let people charge universities charge whatever they want. The government's going to give young people a debt to cover that cost. And then a few years later, we'll just forgive it all. Yeah. And that, I mean, that creates obviously a real problem. And if we forgive it now,

Well, of course, the expectations are we're going to forgive it every time. Right. So at that stage, we've said, okay, free, higher education for everybody. Free and air quotes, right. Yeah, yeah, yeah. Obviously, big news over the past 48 hours is this leak from the Supreme Court. Chief Justice Roberts yesterday confirmed that this leaked opinion was, in fact, Samuel Alito's opinion overturning Roeby Wade and Kay.

I wonder if you've had an opportunity to read any of what Alito has written and if you have whether you find the arguments persuasive. You know, I went to law school. I was smart enough to recognize that I should not become a lawyer. I remember looking around the classroom and saying, you know, if I got into legal trouble, I'd rather hire one of those guys than me. So I better not be a lawyer. And so I'm not a practicing lawyer.

but I obviously spent some time looking at at Supreme Court decisions like Roe v. Wade. And I believed then, and I have since, that the decision was poorly recent. I thought it was a bad decision. I'm more of an originalist than some, and I just thought it was a bad decision. So as I have read through parts of, I've not read the entire opinion by Justice Alito. as I've read through parts of it, I agree with his reasoning. And I know people are focusing, for instance, on him saying that abortion is not rooted in the history and tradition of the country. They're wondering why he's saying that it's in part because under substantive due process,

we do collect certain rights that are not in the Constitution, and we say it's important to protect them. So, for instance, a parent has the right to raise their child and perhaps to, punish their child for doing something wrong. Well, is that in the Constitution? No, but it's seen as a substantive due process right because it is part of the history and tradition of our culture, of humanity, and so we ascribe that right.

Alito is pointing out that's not the case with abortion. Abortion is not part of our history and tradition. And so to say that this is a right which springs in the Constitution is a stretch too far. I happen to agree with him. Now, the considerations that the court had to make with regards to the original decision of Roe v. Wade and the implications of stare decisis, that obviously is a judgment call that the members of the court had to make. I note that I am pro-life, I am supportive of a decision to return the decision on abortion

to the citizens and their elected representatives. And, you know, I wish the temperature would be reduced on this topic, but I don't think that's likely to happen. Well, you know, our own David French actually has sort of a counter-conventional wisdom position on that and has written that after a short convulsion of, you know, emotional outbursts and anger and frustration from one side to the other, that he thinks this actually will reduce the temperature. We talked about it a little bit last night on our Dispatch Live podcast.

He makes a pretty persuasive. I would say I bring some skepticism, but I think David makes a pretty persuasive case on that. And I obviously hope that he's right. The other thing in the news, just in the last 24 hours, last 12 hours, is that J.D. Vance won the Republican Senate primary in Ohio, rocketing from third place in the polling to a victory pretty much as a direct result of Donald Trump's endorsement. He was at 10 percent. He won with about 30 percent. He spent the last few days

before the election campaigning at times with Marjorie Taylor Green, Matt Gates. He's advocated and amplified conspiracy theories related to January 6th. I think engaged in rhetoric that many even fellow Republicans think of as irresponsible. Will you support? him? Oh, no. You know, I'd like to see a Republican Senate, but I'm not endorsing candidates one by one. I don't want to communicate that somehow I endorse everybody's points of view on every topic. And you should note, there are not many people that ask me for their, for my support. He hasn't called you? No, no. It's, well, particularly in primary season. I guess after primary season is it's a different matter. But I jokingly have said that there are a few people that I disliked enough

that I was thinking about endorsing them and just to hurt their prospects. So, I mean, it certainly can't be seen as a big surprise. But there's no question. President Trump has by far the most significant impact on whether someone is going to become a nominee in the Republican Party, certainly in Ohio, and probably true in many of the states, if not all. You know, We'll see what happens in other states. I mean, I'm a little surprised by the governor's primary in Georgia, where Jeveter Kemp continues to lead in the polls. That could change as well. But look, President Trump has an enormous impact on the Republican voters today.

I don't see that as dissipating. I know some think it will or think it already has. I frankly don't see that. The combination of President Trump's endorsement, and by the way, Peter Thiel's $10 million. dollars. Plus, yeah. That's a lot of money. That makes a big difference. It is. Are you surprised that Donald Trump still has this grip on the Republican Party, you know, more than a year after January 6th? Did you think that that was going to be? I did. I mean, I watched it and I thought, oh, my gosh, this is way too far for even the people who have made

lots of compromises that I like to think I wouldn't have made if I were in public office. But apparently not. Yeah, I've been wrong about Donald Trump's political prospects for a long time. I didn't think he'd win the nomination. I didn't think he'd win the White House. And I didn't imagine that he would continue to have the kind of sway he has over the Republican Party. But I've just been wrong. And part of that is that the Republican voters that I'm used to seeing that I campaigned with and in front of is a different group to a certain degree as time has gone on. And people who in many cases were long-term Democrats, you know,

members of the UAW or the steelworkers or whatever, always voted Democrat. Hey, they loved Donald Trump and they became Republicans. Yeah. And then there were a lot of people who were, you know, housewives from the suburbs who typically voted Republican. Many of them have left the Republican Party. So the party is a different group of people than it used to be. And he has a very, you know, tight grip on a lot of them.

Is his influence on the party gaining or waning? today. I don't know that we can measure that at this stage. This is awfully early in the process. I think what happened in Ohio was a pretty powerful statement about, you know, if he really jumps in like he does, or like he did in this case, and campaigns with J.D. Vance and makes it such a centerpiece, that has an impact. Now, I would also note, you know, that, you know, I thought Josh Mandel's performance of the debate where he looked like he was going to pick a fight with some old guy,

that that was really embarrassing. And I think a number of people felt that that was just, you know, beyond the pale. And I'm sure that had an impact as well. They all, you know, they converged at the same time. $10 million, the Trump endorsement and an absurd, you know, chest thumping by Josh Mandel. All those came together.

So we'll see as time goes on. There's reporting out from Politico today that even Donald Trump said he found that, quote, unquote, weird when Mandel sort of stepped to Mike Gibbons on the stage. So I think you're not alone. If I could close with the question about Russia, much has been said about the comments that you made in 2012 when you called Russia our number one geopolitical foe. Obviously, events have, I think, vindicated that answer, despite the fact that you were mocked by President Obama and others at the time. I wonder, when you look at the way that the Biden administration has handled this episode of Russian aggression, I mean, this horrific, brutal invasion of Ukraine, it seems to me they started out a little bit unsure of themselves, but seemed to have found their footing lately, providing more arms, providing better and faster intelligence. It was my understanding on that, right? How do you grade the Biden administration's handling of this crisis?

Well, you know, I think, by the way, we're politically smart to ascribe credit where credit is due. And I think with regards to Ukraine policy that by and large, the Biden administration has done a pretty good job. I start by saying they were wise, in my view, to collaborate with our allies and to say, we're going to do this together. We're not going to go off half-cocked just as the United States and rattle our saber and then complain that no one else is following us.

Instead, we're going to work to get everybody together. We're going to make sure that we don't scare away the Germans or the French. And that was, I think, a smart thing to do. That meant that the sanctions we put in place would have more bite. I mean, look, a couple of decades ago, we represented almost 40% of the world's economy.

Now we're about half that. So to have the economic clout we want to have, we want to link arms with their allies. And they did that well. They were a little slow on the weapons front, but of course so was the Trump administration. That was one of the reasons Trump was impeached, was holding off providing weapons to Ukraine. And so the Biden administration likewise was hesitant to do that. I'm sure they had their reasoning. They were probably worried that they would create an excuse for Putin to enter.

Who knows? But they got on board, and they've been providing weapons. and they have done that in part by getting nations in NATO that have old Soviet era equipment, getting those things to the front, which is all encouraging. Where we go from here, look, there are a lot of questions at this stage, and it's getting more and more frightening in some respects as Putin and his team keep talking about nuclear weapons and the like. this is a very dangerous setting.

And, you know, I wish the president and his team well. I think Secretary Blinken is, and Secretary Austin, they're doing the job we've elected or we've put them in place to do. But there's not an easy answer at this stage. Are you tempted to run for president again, running for re-election? What's your future? Well, I just wanted to make an announcement that I am running again for president. We'll just bury that here at the end.

No, that's not going to happen. I joked that if no one would run, if no one was going to run against President Trump, I might draft myself into duty, but that's not going to happen. He's going to have a lot of opposition. I think if he wants to become the Republican nominee, he will be. I think there's very little question about that, but time will tell. But no, I'm not running. And my decision about running in Utah again, that's not for this show.

Okay, well, we'll be back in touch then. Senator Romney, thanks for the time. We appreciate having you on the Dispatch podcast. Thanks. Good to be with you. With Amex Platinum, access to exclusive Amex pre-sale tickets can score you a spot trackside. So being a fan for life turns into the trip of a lifetime. That's the powerful backing of Amex.

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